The Substitution of steel for wooden ploughs in agricultural production is an example of

1. labor-augmenting technological progress
2. capital-augmenting technological progress
3. capital-reducing technological progress
4. None of the above

Explanation

Option (b) is correct

• Capital-augmenting technological progress improves the efficiency of capital goods, such as machinery, by enhancing their productivity—for instance, replacing wooden ploughs with steel ones. In contrast, labour-augmenting progress boosts worker productivity, increasing output without necessarily increasing the quantity of capital goods used.

Answer: (b) capital-augmenting technological progress; Difficulty Level: Easy